Plea to put ethics at the heart of banking

The society, which is based in Silsden, West Yorkshire, said its results suggested that the “worst effects” of the financial crisis had been weathered.

Paul Ellis, Ecology’s chief executive, said that the UK was “still unwinding from the mad idea that boom and bust had gone for-ever”.

He said that the society was attracting younger members, at a time when many people were seeking an alternative to the banks. Many of the major banks have been embroiled in mis-selling scandals, which has increased the popularity of the mutual sector.

Mr Ellis added: “Our financial success is based on sticking to our core principles: thinking long-term, putting our members first and focusing on our social and environmental impact.

“Our priority for 2013 is to continue to expand our mortgage book, so we can support more and more people to build or renovate sustainably.

“The big five banks saw their profits wiped out by the cost of their past mistakes – isn’t it time they realised that putting ethics at the heart of their work is their only route to a sustainable future?”

In the year ended December 31 2012, the society’s net profit surpassed expectations, increasing by eight per cent to £459,000.

Gross lending was £14.3m, compared with £18.3m the year before, taking overall mortgage balances to £77.34m. Savings balances also exceeded £100m for the first time, ending the year at £101.92m.

In a statement to accompany the results, the society said: “The growth in net profit adds to Ecology’s capital base, increasing the financial strength of the society and enhancing its ability to undertake further lending.

“In 2012, Ecology lent more than £14m for sustainable properties and projects, with 84 per cent of mortgages advanced on residential properties, including new builds, conversions and renovations, and 16 per cent on developments for community gain, including charities, housing co-operatives and community businesses.

“The society reduced total provisions against possible mortgage losses by 70 per cent, suggesting that the worst effects of the financial crisis have now been weathered, and indicating the resilience of the market for sustainable properties.

“All savings and mortgage interest rates have held steady since January 2010, reflecting Ecology’s simple, fair and transparent approach.”

Mr Ellis, who has a salary of £70,000, said he believed the UK economy was facing a prolonged period of very low growth.

Altogether, the society has around 9,000 members.

According to its annual report, which was published yesterday, the Ecology Building Society supported 51 new build projects in 2012.

Thirty four projects backed by the society used rainwater harvesting, and two developments were built with straw bales.

The society provides mortgages for properties and projects which support individuals and communities who are adopting ‘green’ building practices.

In his introduction to the report, Mr Ellis added: “Six years on from the beginning of the financial crisis, a number of things are evident: while the financial system still needs fundamental re-engineering, ethical financial institutions, including Ecology, are in good shape, and there are the beginnings of a realisation that these two facts are underpinned by a common thread.

“It is the right culture, rather than regulation per se, that will maximise socially useful activity by financial institutions and minimise their threat to our economic and ecological security.”